The Management Reporting and Consolidation Project at Kibar Holding

A STORY OF SUCCESS
The Management Reporting
and Consolidation Project
at Kibar Holding was successfully
put into practice
Kibar Holding’s Financial Affairs and Budget Department team, IT team and Oracle business
partner PwC, put an efficient and open-to-improvement “Management Reporting System”
into practice with a project which was specifically developed for budget planning and
consolidation based on the Oracle Hyperion Financial Management product. With the project,
25 staff members/days were conserved, while the failure rate was minimized.
BAHADIR BORAN
Head of the Financial Affairs and
Budget Department, Kibar Holding
“As an organization, we are
focused on taking strategic steps,
and growing bigger with new
investments and improvements.
We need fellow travelers who
will walk this road with us, show
us the way by looking at it from
the outside, provide us with
timely and quality support, and
contribute to our organization.
Upon investigation, we have
come to believe that PwC and
Oracle, with their specialists,
technologies and advisors, are
organizations capable of meeting
our expectations. Their approach
to the project and the fact that
they were by our side at all times,
as well as their proficiency in
troubleshooting proved to us that
our decision was the correct one.”
Mr. Boran, as we begin our interview,
could you tell us a little bit about Kibar
Holding’s activities and goals?
BAHADIR BORAN (Kibar Holding – Head
of the Financial Affairs and Budget
Department): Kibar Holding, which makes
investments in various sectors, is an export-led
organization with 20+ companies. Among Kibar
Holding’s companies, which are active in fields such as
the metal industry, the energy industry, logistics, the
automobile industry, the automative supply industry,
and food and building materials, Assan Alüminyum
is the lead company of the group. Assan Alüminyum
is the biggest company in its field in Turkey and
one of the biggest companies in its field in Europe.
Assan Foods, which is lesser known domestically, is
the biggest tomato paste exporter of Turkey. Kibar
Holding, maintaining its progress at home and abroad
in accordance with its strategic goals, is growing
rapidly as a group with high recognition and a good
reputation abroad.
In creating such an ambitious
organization, from what do you
draw support in order to establish
sustainable success?
BAHADIR BORAN: Setting up systems which
were developed with a standardized and disciplined
FROM LEFT TO RIGHT: TUĞBA SEZGİN KÜÇÜK Planning and Reporting Specialist – Kibar Holding / ALİ ÇETİN Planning and Reporting Manager – Kibar Holding / MEFTUN ÖZTEN
Senior Manager – Project Leader PwC / BAHADIR BORAN Head of the Financial Affairs and Budget Department – Kibar Holding / AYGÜL ÖZKAYKI Sales Manager – Oracle / TUĞÇE
KAMAN Specialist – Kibar Holding / ŞAZİYE ÖZDEMİR Specialist – Kibar Holding / Others on the project team: ÖZGE İTERGEN Planning and Reporting Manager – Kibar Holding.
approach has always been very important for
Kibar Holding. Organizational structures are
aware of the need for technological support
in order to get ahead in the competition, gain
productivity and make a difference. As an
organization we have paid attention to this in
every stage and have come a long way in the
installation of technological infrastructures.
An important part of this has been ERP
infrastructures and management reporting
systems which have helped us make quick and
correct managerial decisions.
You installed a “Management
Reporting System” using the Oracle
Hyperion Financial Management
product. What was the structure
like before the project?
BAHADIR BORAN: Before 2008, we were using
an ERP software application developed by Assan
Bilişim, one of the group companies. However,
because of the rapid progress of technology,
emerging requirements which needed to be
quickly met, and high maintenance costs, we
started looking for different solutions.
In 2008, we started to shift a considerable
number of our companies onto a readymade ERP
infrastructure, Microsoft Axapta. Two of our
companies still use the ERP software developed by
Assan Bilişim. These two companies, active in the
construction and logistics industries, use different
ERP software as they need special solutions. Two
of our other companies are switching over to SAP.
As a result, we have different ERP platforms, and
therefore a platform-independent Management
Reporting System which is able to navigate these
different ERP platforms became a significant
need. For this reason, we launched a project with
PwC and decided on using the Oracle Hyperion
Financial Management product, trusting it would
offer us the best solution.
MEFTUN ÖZTEN (PwC – Senior Manager
and Project Leader): Kibar Holding is
a very dynamic, fast-growing organization
capable of making changes at any time in the
group. This means that new companies with
very different infrastructures may become a
part of this group. For this reason, there was a
need to create a management reporting system
which is not dependent on a specific database or
various sub-systems. The most important feature
and advantage of Oracle Hyperion Financial
Management, which is the product we decided to
use, was that it functions effectively on different
systems in a platform-independent manner.
Were there any critical expectations
in the reporting other than it being
platform-independent?
BAHADIR BORAN: The reporting had to be
compatible with the International Financial
Reporting Standards (IFRS). As you know, the
Turkish Commercial Code was amended and took
effect last year. Certain sized companies have to
prepare their financial statements in accordance
with the Turkish Financial Reporting Standards
(TFRS) which are equivalent to the IFRS.
At the moment, the reporting system at Kibar
Holding is a practice completely based on the
IFRS. We prepare our financial statements in
accordance with the TFRS, and by extension, the
IFRS. However, as each company’s accounting
entry structure must be compatible with the
Tax Procedure Law of the country they do
business with, and thus have different formats
in their sub-systems, we cannot automatically
transfer them to the reporting infrastructure. The
users create IFRS results with a semi-automatic
process from their own balance sheets and upload
these results to Hyperion through specially
designed data entry displays. In this sense, Oracle
Hyperion Financial Management allows us
significant flexibility and speed.
A STORY OF SUCCESS
In the upcoming period, if Kibar Holding goes
public or issues securities, we are now capable of
creating and quickly sharing any type of report
required of us.
The reporting system makes up an
important infrastructure for the
corporate memory as well, doesn’t it?
BAHADIR BORAN: Corporate memory is very
important indeed, but what is more important is to
catch up to speed for sustainable success. Creating
the most accurate financial statements possible with
comments and analyses in the appendixes in one
go, as fast as possible, and presenting them to the
decision makers has become vital for organizations
such as ours. We have to establish reliable decision
support mechanisms.
MEFTUN ÖZTEN
Senior Manager Project Leader,
PwC
“Kibar Holding is a very
dynamic, fast-growing
organization capable of
making new purchases at
any time. This means that
new companies with very
different infrastructures may
become a part of this group.
For this reason, there was a
need to create a management
reporting system which is
not dependent on a specific
database or various subsystems. The most important
feature and advantage of
Oracle Hyperion Financial
Management, which is the
product we decided to
use, was that it functions
effectively on different
systems in a platformindependent manner.”
For this most basic reason we started looking for
solutions. We wanted to accelerate the information
flow, put it in a certain format and be able to analyze
fast. Consolidating the data under one roof was
not the main objective for us. We really wanted
to establish a reporting and decision support
mechanism, and render this structure utilizable.
This is not simply creating financial statements. We
carry out profitability and segment analyses, we
carry out measurements, and also desire to do these
in a fast fashion.
What was your biggest problem prior to
creating this structure?
BAHADIR BORAN: The most important problems
were time loss and being in a place more prone to
mistakes. As there are more than 20 companies
under the umbrella of Kibar Holding, the slightest
format change led to great time loss and mistakes. It
was a very tiring process, and it wasn’t easy at all to
face mistakes after so much work had been done.
What kind of transformation is
happening these days?
BAHADIR BORAN: We now use ERP
infrastructures as platforms of data entry, and
run the formatting, consolidation, analysis and
comments sections via Oracle Hyperion Financial
Management. Consolidation will be run parallel for
a time. However, we immediately made the switch
to companies reporting directly.
Ms. Küçük, you were in contact with the users
during the process of popularizing the project
among the group companies. What were your
experiences and observations during this process?
TUĞBA SEZGİN KÜÇÜK (Kibar HoldingPlanning and Reporting Specialist):
We first created the format in February, and
retrieved various data from Hyperion to create
the management report. In March we organized
training seminars for all the group companies,
and expected them to upload February’s data
onto the system themselves and create their own
management reports. We continued to provide
support throughout the month of April. By May
they were able to use the system effectively, upload
the data on their own, and create their management
reports without the need for support. Their speed
in doing so has increased steadily to this day, and
the mistake rate has decreased significantly. Also,
the reports we are preparing are excelling with each
new one.
How much time or labor force have
you conserved?
BAHADIR BORAN: We used to set aside time in
our division for each company, and have one person
be in charge of this process. We would set aside 1 or
½ a day per company.
As a result, we have now conserved 25 staff
members/days per month through this structure
we’ve created with Oracle Hyperion Financial
Management.
TUĞBA SEZGİN KÜÇÜK: We also expect that
the contributions of this system will gradually
increase. We have uploaded a lot of data regarding
the budget and continue to upload more. For
example, in the near future we will also be
implementing the “Forecasts” section. In this way,
we will be able to comparatively retrieve the data
we want, whenever and however we wish. Doing
this using MS Excel, as we used to, was quite a
troublesome and time-consuming process. With this
new system, a great database is also created for all
the companies.
What do you think has played the
largest role in your success?
BAHADIR BORAN: This success is first and
foremost due to the harmony accomplished by the
teams under our organization and the teams we
have worked with outside our company. I thank the
teams involved in the project under the umbrella
“The Financial Affairs and Budget Department team of Kibar Holding, one
of Turkey’s most export-ambitious organizations, the IT team and the team
from PwC, Oracle’s business partner, have come together to accomplish
a true project of productivity. By transferring the old data to Oracle
Hyperion, they were able to create management reporting compatible with
the IFRS in a very short time. Not only that, but they were able to conserve
25 staff members/days per month… We are extremely proud to have been
a part of such a successful project.”
AYGÜL ÖZKAYKI Sales Manager, Oracle
of Kibar Holding, and I especially thank Assan
Foods Finance Director Ferhat Oral, as well as the
PwC team, who has always been by our side when
needed, for their support.
Could you tell us a little bit about the
topic of intercompany consolidation?
MEFTUN ÖZTEN: Process management and
system, they need to activate certain processes and
verifications. This used to be a separate work load
for us. We tried to do it all from the central unit
here. Now the companies do this work themselves.
We receive financial statements which have been
verified and are 90% accurate. Then we consolidate
all the financial statements here via Hyperion.
verification is very important at this point.
Having a central command of all the processes
and functionalizing the verifications makes
intercompany consolidation naturally possible.
In a total of three months you have
finished the first phase of the project.
What goals do you have now for
the future?
TUĞBA SEZGİN KÜÇÜK: Our goal is that
BAHADIR BORAN: Financial statements are
certain reports are uploaded to the system on
certain business days. For example, we expect
the intra-group transactions of each company to
be uploaded to Hyperion on the sixth business
day. On the seventh business day, we expect
the companies which have entered their data
reciprocally to make their agreements. We aim
to minimize the number of non-agreement
situations. On the eighth business day, each
company creates their own reports. Once the
financial statements have been uploaded to the
ORACLE TECHNOLOGIES USED
+
Oracle Hyperion Financial
Management
not actually only three or four pages long. There
is a 90 page report set and a long list of footnotes.
We want to process all of these, including their
footnotes, via Hyperion. Yes, there is a legal
obligation, however, creating a platform with
which we can measure our operational goals and
financial goals, as well as quickly follow them, is
the actual added value to our company.
Our work is not limited to these jobs. Up until
now we have focused on creating financial
statements and the follow-up processes. However
there are also the processes prior to creating the
financial statements. For the processes prior to
creating the financial statements, there will be
decisions we will have to make by getting together
with different teams regarding IT strategies which
we will determine with the IT department. If
needed, we will discuss our ERP systems again,
work to improve, and enable new tools to come
into play. To summarize, we still have a lot of
work to do in terms of financial processes. For
example, transferring the current reports to a
mobile environment, and adapting the practices
related to detecting or preventing erroneous
transactions known as GRC (Governance, Risk
and Compliance) to the financial processes on
time are only two of the jobs that lie ahead of us.
Lastly, could you tell us a little
bit about why you chose PwC?
BAHADIR BORAN: As an organization, we are
focused on taking strategic steps, and growing
bigger with new investments and improvements.
We need fellow travelers who will walk this road
with us, show us the way by looking from the
outside, and provide us with timely and quality
support.
Upon investigation, we have come to believe
that PwC and Oracle, with their specialists,
technologies and advisors, are organizations
capable of meeting our expectations. Their
approach to the project and the fact that they were
by our side at all times, as well as their proficiency
in troubleshooting proved to us that our decision
was the correct one.